IDENTITY RING SAID TO VICTIMIZE 30,000

By BENJAMIN WEISER

Published: November 26, 2002

An identity-theft ring that relied on a low-level employee of a Long Island software company stole the credit histories of more than 30,000 people and used them to empty bank accounts, take out false loans and run up charges on credit cards, among other crimes, federal authorities in Manhattan said yesterday.

This is believed to be the largest-ever identity-theft case in the nation, federal officials said yesterday, in terms of the number of victims, the type of detailed personal information about them that was stolen and the losses -- at least $2.7 million and likely to climb much higher. The authorities were still trying to determine how many of the 30,000 victims suffered financial losses.

The ring sold the credit histories for up to $60 each to a group of conspirators in the Bronx and Brooklyn who had already stolen or obtained partial information about the victims like names and Social Security numbers, a federal complaint said. So far, three people have been arrested and charged in the scheme, including the man accused of stealing the credit histories, who appeared in court yesterday.

The scheme had operated for nearly three years but came to light only in the past year. The federal investigation began eight months ago after the F.B.I. learned from the Ford Motor Credit Company, of Dearborn, Mich., that someone was using its codes to impersonate the lender to Experian, one of the three major credit-reporting agencies, the bureau said yesterday. The impersonator had pulled credit histories nationwide for about 15,000 people, who were reporting a high volume of fraud, officials said.

James B. Comey, the United States attorney in Manhattan, said the fraud was ''every American's worst financial nightmare multiplied tens of thousands of times.''

A credit history includes personal information about a person's bank and credit card accounts, including the numbers and available credit, and with it, someone could assume the identity of the victim and use the accounts or open new ones.

''With a few keystrokes,'' Mr. Comey said, ''these men picked the pockets of tens of thousands of Americans and, in the process, took their identity, stole their money and swiped their security.''

Mr. Comey said that there was no evidence of a terrorist connection to the fraud, and that it rather involved hundreds of criminals ''who prey on this kind of information.''

Mr. Comey said that beyond draining victims' bank accounts, the fraud ring had changed the address on bank accounts, ordering new checks which were then drawn on the account; lines of credit were opened and quickly depleted; and criminals assumed the identity of people to order merchandise that was then shipped to different locations.

''In short, a lot of people were ruined financially, and their credit was ruined financially, by this scheme,'' Mr. Comey said.

Officials provided little detail about the victims, but in one case a few days ago, Mr. Comey said, a woman called up in tears to report that someone had written a $34,000 check on her line of credit.

In some cases, like credit card fraud, there may be limits on the liability of individuals, because they were not at fault. But significant financial losses would be shouldered by banks and other institutions, and ultimately the cost would be passed on to consumers.

Quantifying the size of identity-fraud rings is difficult, because some victims do not even know they have been victimized until long after the fact, and others may not file a report, as the General Accounting Office noted this year in two reports.

Over the past few years, there have been news accounts of cases involving thousands of victims, and losses ranging from hundreds of thousands of dollars to as much as $2 million. But law enforcement officials said yesterday that the new case stands apart because of the large number of complete credit histories that were sold to criminals and the expectation that the numbers of victims and the monetary losses will grow significantly. ''How high it will go, it's going to be some time before we know,'' Mr. Comey said.

Prosecutors say the scheme involved a former ''help desk'' worker at a Bay Shore, N.Y., company that provides software for banks and other companies to obtain credit histories from the nation's three largest credit bureaus. Starting about three years ago, the employee, Philip Cummings, 33, used his computer access at the company, Teledata Communications Inc., to learn the passwords and access codes used by companies to download credit information about individuals, the government said.

Mr. Comey said another man, Linus Baptiste, 43, of New Rochelle, N.Y., obtained from street criminals a ''wish list'' of names and Social Security numbers that had been stolen. After Mr. Cummings obtained the data, Mr. Baptiste would sell it to the ring, Mr. Comey said.

The ring included at least 20 conspirators, according to a criminal complaint unsealed yesterday. Mr. Baptiste was arrested on Oct. 29 and charged with one count of wire fraud. One of his lawyers, Marshall A. Mintz, declined to comment. Prosecutors said a third defendant, Hakeem Mohammed, had pleaded guilty to charges of mail fraud and conspiracy.